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Wednesday, August 08, 2012

CCI to investigate in auto-units’ monopolistic behaviour

The Competition Commission of India (CCI) has initiated for the inquiring the present method of the auto-units for not permitting their dealers to open some other brand outlet.

This monopolistic behaviour is not only getting common in the car units but also it has become a practice of the truck and bus manufacturers. As per the automobile sources, the Maruti car dealers are not allowed to open outlets for premium cars like Audi, Mercedes Benz. This is also practiced in case of opening the commercial vehicle outlet by any other auto-brand dealer.

As per a source, a Maruti Suzuki dealer in west had to give up a premium car dealership even though the letter of intent was issued. Same goes for the Maruti Suzuki dealers in north India.

About the matter, a Maruti official stated that the auto-unit is principal to principal subject as mentioned in the dealership agreement guidelines. He added that they have not manipulated dealer agreement and only one type of the dealership agreement is followed by all the dealers.

Moreover, according to the sources, auto-units like Toyota also follow the similar trend. The Toyota dealer of Frontier Vehicles in Jabalpur was also asked to opt between Toyota and Volkswagen when he was looking to expand his network. Speaking on the matter Anant Wadhwa of Frontier Vehicles stated that he was serving for Toyota for more than eight years and when he looked up for expansion with Volkswagen, he was asked by the Toyota unit to choose either Toyota or Volkswagen. Finally, he decided to go for Volkswagen.

Speaking on the matter, the Toyota Kirloskar MD, Mr. Sandeep Singh stated that they have Hyundai and Ford dealers also in their network and they check the dealer’s financial and managerial capacity prior taking a decision.